CRM software a must-have for businesses

Vormittag Associates Inc. in Ronkonkoma markets and supports a CRM system as part of its full set of enterprise products.

Customer relationship management software programs can empower salespeople by streamlining their efforts and putting useful customer information at their fingertips to help them close a deal. But in order for CRM to be most effective, companies and their salespeople have to commit to learning the systems and doing their part to make them work.

What CRM can do

Vormittag Associates Inc. in Ronkonkoma markets and supports a CRM system as part of its full set of enterprise products. “Our customers mainly use it to communicate with customers and prospects and to get a 360-degree view of the customer relationship,” said Pete Zimmerman, manufacturing segment manager for VAI.

“In addition to managing contacts with prospects and customers, CRM software helps companies learn information about these individuals or businesses and capture and store what has been learned,” said Steven Hosmer, president of AMB Marketing Corp., a Garden City company that installs, supports and provides training for CRM and sales force automation systems.

“The companies can then leverage that knowledge to convert more leads, increase sales and extend the average lifetime of existing customers,” added Hosmer, who said a company can use one system to track leads, track the sales process and track and service existing customers.

Hosmer gave the following example to illustrate how a company might use its CRM product to turn leads into customers.

“When individuals register online, perhaps in response to a promotion, they receive an automatic e-mail signed by their salesperson thanking them for their registration and informing them that the company will send them an information packet by mail,” he said. “The next day, material is mailed with a follow-up letter, also signed by the salesperson. Three days later, a second e-mail goes out, again automatically, commenting on the material sent and noting the salesperson will call in a few days. “Multiple promises were made, and the company delivered on those promises to build trust,” Hosmer continued. “A few days later, when the salesperson calls, the individual will already have received three communications from that salesperson and will know the salesperson’s name and company name.” All the communications prior to that call will have been handled automatically by the CRM system and by administrative staff, freeing up the salesperson to do what he or she does best – pursue hot leads and close deals.

“It amplifies the use of a salesperson’s time,” Hosmer said. “It makes it look like he or she has been very active, but really, the salesperson just makes that one phone call to a warmed-up prospect.”

Additionally, a CRM system can make it easy for salespeople to share information with one another, said Bob Venero, president and chief executive of Future Tech Enterprise Inc. in Holbrook, which sells, integrates and supports multiple CRM packages. For instance, if several salespeople have worked on the same account, they can view notes on when the client was last called or about successes or failures, and use that intelligence in their sales efforts.

CRM systems may have opportunity management features, which allow salespeople to score leads based on criteria such as the size of the potential business or whether the potential customer requested information about a product or service, said David Myron, editorial director of CRM Magazine in New York. Myron added that a contract management feature can allow a company to reach out to customers before their contract expires, to encourage them to renew rather than leaving for a competitor.

CRM software can also be used for event-based marketing, in which customer information is gathered and used to market products that the customers may need at a given time.

For instance, if a bank sees that a customer’s account balance suddenly grows from $2,000 to $20,000, it can contact the customer regarding investment opportunities. Or if the customer has a 17-year-old child, the bank can contact him about college loans.

Limitations of CRM

Qosina Corp. in Edgewood installed a CRM system in 2003. “We use it for front-office dealings with our customers,” said Gerry Quinn, chief operating officer for Qosina. This includes sending samples and catalogs, answering requests for information and tracking each step. “It handles all activity before a sale is made,” Quinn said.

Getting its staff to adopt the software “took some doing,” said Quinn, adding that a CRM trainer worked with the company for two months to get it off the ground.

Acceptance or rejection of a CRM system by the sales staff can depend on how it is introduced, said Jacob Jegher, a senior analyst for Celent, a Boston-based research and consulting firm focused on the application of IT in the financial services industry. “A bit of change management has to take place. Employees have to be trained and taught to understand the benefits. If it’s dumped on them and they’re just told to go use it, it’s not going to work.” Adopting CRM software requires a cultural change, Venero noted. “But once salespeople see how it frees up their time and increases sales, they will embrace it,” he said. “Most salespeople are coin operated; if this helps them get coin, they will want to use it.”

Incentives need to be tied to the use of the system, Jegher said. “If salespeople will get knocked on their performance appraisal for not using it, they will start using it,” he said.

CRM systems can do many things – and sometimes, too many bells and whistles can make a system too complicated to learn or use. Quinn acknowledged that Qosina doesn’t use its CRM product to its full capacity. “After four years, we’re still figuring out how to best do that,” he said. “Our CRM product is from Microsoft. I don’t think there’s a Microsoft product that anyone uses even 40 percent of.”

Grassi & Co., a Lake Success-based accounting firm, uses a CRM product to track client/prospect communication and target subgroups of clients and prospects to receive specific e-mails or mailings. “The system is only as good as the data,” said Adam Wolf, director of marketing and business development. “If someone called on a client and didn’t input what he learned from the call, the information won’t be in there.”

Another limitation is the expense. “The software is expensive to set up, and given the current economic climate, IT budgets are very tight,” Jegher said, referring to the financial industry.
According to Venero, hosting models, in which the CRM database sits in the provider’s environment and users access the information via the Internet, is often a more economical choice. Many companies, including Future Tech, provide CRM hosting as an option, he said.

“Often, organizations prefer their product to sit on their own environment, so they will have more control,” Venero said. “With the hosting model, if you lose Internet connectivity, you can’t use the system.”

Who stands to benefit from CRM?

Companies of every size can derive some benefit from CRM applications, Venero said. However, CRM can have a greater impact on certain types of businesses, such as those with a large sales force or who those who need to manage a high volume of leads.

“Manufacturers and wholesale distributors who want to inform their customers about promotions or new products could benefit greatly from a CRM system,” Zimmerman said.

Hosmer said CRM is especially helpful for sales of high-ticket items or products with long sales cycles. “An excellent example is the remodeling industry,” he said. “Better than 60 percent of people who contact a remodeler will do a remodeling project within a year. They may contact you a year before they do a project, and if you do not have a method to maintain contact, that person might see an ad just before making a decision and choose to go there.”

But by keeping in touch over time, a company can be the one the customer turns to. “If you build trust and consistency, you can become the gold standard by which customers judge all your competitors,” Hosmer said. “When something triggers them to buy – if Aunt Ethel dies and they inherit the money, or they get a bonus at work – you want to have an e-mail in their box that isn’t more than 30 to 45 days old, and you want them to think of you first and foremost.”

5 comments

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